Mr. WOLCOTT. We are at the low now?

Mr. COLE. It is beginning to approach that.

Mr. BETTS. Peak of what?

Mr. COLE. Family formations.

Mr. WOLCOTT. They are at a low now. The war babies are not yet at the age bracket where they are forming families.

Mr. COLE. Mr. Wolcott, I think in a market where we have a very high level of production it is important that we look at it very carefully.

Mr. WOLCOTT. Has your Agency, or the Census Bureau, or any other agency of the Government, made a survey to determine where all these families are coming from that are going to take up these 1,300,000 units?

Mr. COLE. No, we have no information on it.

Mr. WOLCOTT. Is there any information in Government on that point?

Mr. COLE. I doubt if the Bureau of the Census has any study which would meet the question that you are raising, Mr. Wolcott.

Mr. WOLCOTT. Would it not be interesting to know where these families are coming from, whether they are coming from rental units to homeownership, whether they are coming from new family formations, whether they are coming from presently owned and occupied homes to new homes?

I ask that primarily because when we passed the Housing Act of 1954 we thought we were enacting a housing act that would end all housing acts, and we are building at a rate now such that certain members of the Joint Committee on the Economic Report, and other economists, are warning us that we are overbuilding, and that we might reach a slump period in home production because of the impetus which has been given to homeownership by the Housing Act of 1954. This has become the $64 question.

In other words, if we are building so many homes under the present law why do we need any change in the law?

Mr. COLE. Mr. Wolcott, to return to your original question, I think it would be interesting and helpful to have data and information of this kind.

Any information which will help this Agency, or the others in the Congress, and in the executive branch to assist them in formulating judgments projecting into the future the requirements of the country would be very important and very helpful. It would help us answer such questions as Mr. Nicholson asked. It would help us answer the question the chairman asked a moment ago about the housing supply. It would be extremely helpful to assist industry in planning for the future as well.

Mr. WOLCOTT. Would you have any objection to some of us initiating such a movement in some agency of the Government and authorizing an appropriation sufficient to get that kind of a study?

Mr. COLE. Mr. Wolcott, no. I am in favor of doing anything we can to get any information which will assist the Congress and the Government to come to some more sound conclusions with respect to the market for housing and the credit of the Nation, or the need for additional-housing, or the lack of such need.

Mr. WOLCOTT. I am glad you answered in that way. I assumed you would be willing to help us seek information which would be helpful to your agency.

Mr. COLE. It is one of the frustrating things that I have found, Mr. Wolcott, that we do not have sufficient information.

Mr. MASON. Mr. Wolcott, could I add to Mr. Cole's

Mr. WOLCOTT. I don't like to follow this up because you might be embarrassed.

Mr. COLE. I have been embarrassed before.

Mr. WOLCOTT. If you don't have this information how do you justify changes in the law?

Oh, I will withdraw the question.

Mr. MASON. Mr. Wolcott, could I just add to what Mr. Cole said about the need of these figures?

I am so recently from business that I still know how badly business needs these same advices that Government is asking for, and that the Congress is asking for, that you suggest.

Mr. WOLCOTT. Has the agency, or do any constituent parts of the agency have sufficient money available to make such a survey? Mr. COLE. No, I think not, Mr. Wolcott. As I see such a survey it would require-I haven't any idea how much, but I am sure it would require a considerable amount of money.

I would be happy to pursue it further with you and see what the possibilities are.

Mr. MULTER (presiding). Dr. Talle.

Mr. TALLE. I am interested in what you say about statistics. In the Eighty-third Congress I was chairman of the subcommittee on economic statistics of the Joint Committee on the Economic Report. We did our work as an assignment of the full committee, the Joint Committee on the Economic Report. The substance of our hearings was that we needed more, better, and prompter statistics.

Mr. COLE. Correct.

Mr. TALLE. And we have been going about it ever since, and we have five task forces working now. We are getting excellent cooperation from the Federal Reserve Board.

I am wondering, in this instance, would you work with the Bureau of the Census, or are you equipped in your organization to point out what is needed in the way of information?

Mr. COLE. I think we have technicians throughout the agency, FHA, Home Loan Bank Board, and others, who could be very helpful in developing, first, the type of information required, and would be very helpful in setting up the program.

I would not want to give a categorical answer except to say to you that I think the Bureau of the Census, the BLS, or some agency equipped to undertake statistical gathering, data gathering, would be better equipped than our agency.

Mr. TALLE. I surely was pleased when the President, for the first time in our history. included in his budget message what is called a special analysis, and recommended an additional appropriation of 4.8 million dollars for that purpose, and I do hope that the Congress will agree to that.

As all of us know, there isn't very much romance in statistics.
Mr. COLE. Very true.

Mr. TALLE. But if we don't have adequate information we surely cannot make intelligent judgments. And I know that in the 1920's industry and business made decisions they never would have made had they had better information. We have the best statistics in the world. Nevertheless, they are not good enough, and whatever we can do to encourage the Congress to furnish money for the obtaining of that information would certainly be forward-looking and constructive.

Mr. COLE. Dr. Talle, Mr. Wolcott asked and withdrew a very pointed question. He said how can you intelligently forecast the future when you don't even know what the present is.

May I say to you that we do the best we can, and we have some very intelligent, able people doing this job, but assuming that they do not have sufficient information then we must recognize that their forecasts will be erroneous one way or the other. This is not a criticism of anybody or any program. It is just one of the things which we face.

Mr. MULTER. May I suggest that this committee with your help when you were on the committee, has done a pretty good job of forecasting.

Mr. COLE. I think we do a wonderful job considering some of the tools we have to deal with.

Mr. TALLE. I want to make it clear that I am not criticizing. I am commending the President for including the special analysis on economic statistics in his budget message. I was delighted that as much money as was provided was furnished last year, and I hope the Congress will appropriate the additional 4.8 million dollars, because that, I feel, would be money very well spent and surely will yield dividends. So I will be glad, Mr. Cole, if you will make known to the proper authorities, and to me, your need for such information.

Mr. COLE. Thank you.

Mrs. GRIFFITHS. Mr. Chairman.

Mr. MULTER. Mrs. Griffiths.

Mrs. GRIFFITHS. Since this is so necessary to business why hasn't business developed this information?

Mr. COLE. I wouldn't know. It is not the type of thing that business could do, in my judgment. I don't think Mr. Mason meant to indicate that it was useful only to business.

Mrs. GRIFFITHS. But it will be useful to them?

Mr. COLE. This is certainly not my idea. It is my idea that Government needs it more than business does, really. Mr. Mason might comment upon the business aspect of it.

Mr. MASON. Mrs. Griffiths, I don't believe that business can ask the questions in the right places to get the answers, and that is the reason business can't do it. This is one of the things that business has to depend on Government for. Business cannot work without Government, I am sure of that.

Mrs. GRIFFITHS. Why can't they ask the questions directly, Mr. Mason?

Mr. MASON. Because they are not able to get the answers that are required. I mean businessmen can't go and ask questions as a census taker asks questions.

Mrs. GRIFFITHS. Why can't they?

Mr. MASON. Well

Mr. COLE. I will answer that. They don't have the legal right to, and they would absolutely refuse to answer.

Mrs. GRIFFITHS. Who would refuse to answer?

Mr. COLE. The business people would refuse to answer.

Mrs. GRIFFITHS. You mean they won't cooperate with other business people?

Mr. COLE. Absolutely they won't cooperate with their competitors. They won't do it.

You see, the reason that the census can do it is it is the law. In addition to that, a businessman, not only being required legally to answer, knows that his answer will not be used against him competitively.

May I say that many of the trade organizations do have and are moving a long way toward securing cooperative programs where they develop and gather information, but they have a right tough time getting it done.

Mrs. GRIFFITHS. Well, if this information is used as information when the Government gathers it, isn't it used competitively? Mr. COLE. No.

Mrs. GRIFFITHS. Why not?

Mr. COLE. Because the businessman who gives an answer knows that that answer cannot be used individually against him. This becomes a statistic available as a part of an overall statistical data.

Mrs. GRIFFITHS. What kind of answers would you be gathering that might embarrass a man individually?

Mr. COLE. I don't know. There would be a lot of them. In some of them, I have no brief for the fact that the businessman won't answer. I just say that he won't answer.

Mr. MASON. What was your production last year? How many squares of shingles did you make? Things like that no businessman wants to tell his competitor. What was your cost? This is the kind of information

Mrs. GRIFFITHS. If they are going to pay the bill themselves, I think they would answer.

Mr. MASON. I fear that businessmen would question whether they have a right under the antitrust laws to answer these questions, too. Mr. COLE. It is quite an interesting procedure.

Mr. TALLE. Mr. Chairman.

Mr. MULTER Mr. Spence before leaving suggested that we adjourn at 12 and resume at 2:30 Would that be agreeable to you gentlemen? We will recess at this time and reconvene at 2:30.

(Whereupon, at 12:03 p. m., a recess was taken in the committee until 2: 30 p. m. of the same day.)

AFTER RECESS

The committee met at 2:30 p. m., the Honorable Paul Brown presiding.

Present Representatives Brown (presiding), Patman, Multer, O'Hara, Reuss, Mrs. Griffiths, Vanik, Bell, Wolcott, Gamble, Talle, McDonough, Betts, McVey, and Hiestand.

Mr. BROWN. The committee will come to order.

Mr. Multer, do you have some questions of the witness?
Mr. MULTER. Yes, indeed, Mr. Chairman.

I believe just prior to recess we were talking about what we could expect by way of new building in the years ahead, and how fast it might catch up with the demand.

I think it would be well to put in the record at this point this brief excerpt from this committee's report in the 81st Congress, in which we said as follows:

Attempting to get some measure of the magnitude of our present and prospective housing requirements, your committee had available to it comprehensive studies and investigations of the Joint Committee on Housing. This data and other material made available to your committee leads to the conclusion that the Nation must be prepared to build or rehabilitate at least 1,300,000 nonfarm dwelling units and between 200,000 and 300,000 units a year each year from now until 1960 if substantial progress is to be made in bettering our housing conditions.

Then in 1954 when Mr. Cole was before our committee he indicated that it looked as though, and I quote:

If you build a million houses we are satisfied we will be producing and consuming in our present economy a commodity which is essential.

In light of things since that time I think it is fair to say we are not overbuilding if we build 1,300,000 nonfarm dwelling units a year. Mr. COLE. I don't believe we are, Mr. Multer.

Mr. MULTER. Of course, you can't help but catch up in some areas, and you people acting for FHA under the law will have to say "No more FHA insured loans in that area." While you may be caught up in one area there will be other areas where you must go on and give every possible encouragement to building new homes there.

Mr. COLE. That is true. That is the point that Mr. Mason made earlier in his testimony and may I add I think both the Government and industry has a responsibility to examine the market carefully, and if I were a builder I would certainly like to know whether or not a given type of house, size, price, location, fit the market of that particular community. That is part of the operation of examining the market.

Mr. MULTER. When you were before the committee earlier, Mr. Cole, I think you told us you had not yet set up your program under section 220. I think you used the words "you were not programed." When do you anticipate any building under that program?

Mr. COLE. We have made considerable progress. May I say there are still some problems involved in the 220 program. These problems primarily resolve around the attraction of sponsors in the large cities, particularly in those cities which have heretofore had title projects, either approved or partially completed along the road, and then for one example the land valuation changes between the time that they purchase the land and now, when they are ready to build.

There are many problems involved, but I think that FHA and the Urban Renewal Administration and the Office of the Administrator now sees the possibility that these will soon be approved and underway, or many of them.

We are not satisfied that all of the problems have been licked, Mr. Multer. The criteria of value and the obvious desire of the contractor or sponsor to be sure that the valuation placed upon the project approximates his cost, together with many other roadblocks and difficulties, have caused considerable complex problems to arise.